Obama Urged to Act on China’s Alleged Cyber Theft

By Brian Wingfield -
Mar 28, 2013

President Barack Obama’s
administration should take action to curb China’s alleged cyber
theft, two House Democrats said, after a top U.S. official
accused the Asian nation of spying on American companies.

The U.S. Trade Representative’s office needs to designate
China as a top violator of intellectual property rights, which
can lead to further trade restrictions, Representatives Sander Levin of Michigan and Charles Rangel of New York said today in a
letter to Acting USTR Demetrios Marantis.

“In the case of China, the government itself appears to be
actively stealing the intellectual property of American
businesses,” the lawmakers, ranking Democrats on the House Ways
and Means Committee, which deals with trade issues, wrote.

China’s cyber espionage against U.S. businesses is adding
tension between the governments of the world’s two largest
economies, Obama’s National Security Adviser Thomas Donilon said
in a March 11 speech in New York. In their letter, Levin and
Rangel cited a February report by Mandiant Corp., an Arlington,
Virginia-based information security firm, that concluded the
Chinese government is probably the source of recent hacking
attacks.

The lawmakers asked the USTR to list China in the annual
assessment of intellectual property rights protection and
enforcement in in other nations, to be released about April 30.

Rampant Theft

“We have received the letter and are reviewing it,” Carol Guthrie, a USTR spokeswoman, said in an e-mail.

The USTR will seek to toughen trade-secret protection
through the annual assessment, the Obama administration said its
strategy to mitigate violations, released in February.

“IP theft continues to be rampant across China,
particularly online,” Jasper MacSlarrow, a U.S. Chamber of
Commerce official dealing with intellectual property policies,
said in a statement. “Promoting greater improvement to China’s
IP environment will benefit both foreign and Chinese rights
holders.”

Intellectual-property protection is among the issues being
negotiated as the U.S. seeks trade deals with 10 Pacific-region
governments and the 27-nation European Union. Companies
including New York-based Pfizer Inc. (PFE) and Dow Chemical Co. (DOW) of
Midland, Michigan, rely on enforcement of trade laws to protect
their patents.

Protection ‘Essential’

“Intellectual property is the lifeblood of the U.S.
economy, and the protection of intellectual property is
essential to U.S. jobs and competitiveness,” Senators Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican,
wrote in a March 22 letter to Marantis. The lawmakers are
members of the Senate Finance Committee, which has jurisdiction
over trade issues.

Hatch also has proposed legislation to create a position at
USTR to oversee intellectual-property during trade negotiations.

Intellectual-property provisions shouldn’t be in a proposed
U.S.-EU trade deal because they could raise health-care costs,
limit free speech and restrict access to education materials,
Washington-based consumer group Public Citizen said in a March
18 statement joined by other organizations.